Who will whistle?

The new EU whistleblowing directive can help companies build more ethical corporate cultures. It is a good first step, but should be seen as just that - the first step of many.  

The new EU directive will enter into force in 2021. One of the main areas of the directive describes that 'there is an obligation to create effective and efficient reporting channels in companies of over 50 employees or municipalities of more than 10,000 inhabitants. This will contribute to the development of a healthy corporate culture.' (Read more here)

Ensuring protection for whistleblowers is obviously good and important. It is critical to effective risk management that employees can report irregularities within their own organisation - fear of losing their job or reputation should never be a factor.  

But implementing clear reporting channels and a promise of anonymity and protection from reprisals is really no more than a hygiene factor. Companies need to do more. A "law-abiding" and ethical business is not only achieved by implementing the right channels.  

PROACTIVITY IS THE BEST MEDICINE

Wouldn't it be better not to have to resort to a whistleblowing system at all? In an ideal situation, compliance risks are prevented and stopped before they occur. This requires transparent communication and internal discussions. Ethics is not something you do once - it requires continuous work.  

If you have a code of conduct, for example, you need to make sure that your employees really understand how to apply it in their daily work.  

"SPEAK-UP CULTURE

Companies also need to focus on creating a "speak-up" culture, where individuals feel they have the courage to speak up and question - directly to their boss, their manager's boss or, in the worst case, via a whistleblower system. Compliance risks live in the culture. It's not just about having the tools to report, it's also about having the responsibility, courage and confidence to do so.  

At Involve, we always advocate working with compliance and ethics in a broader perspective than the standard "read and sign the code of conduct" approach. This is because we strongly believe that minimising compliance risks and building an ethical corporate culture is a proactive and iterative process. It requires continuous learning, open discussions and leaders who lead by example.

Some might say they did everything right once they implemented their whistleblowing system - now everyone can speak out and report if they feel they need to. We know that's not the case. To minimise compliance risks, you must dare to look at your own company culture with a critical eye.  

The new EU directive is a good first step in minimising compliance risks - but it is important to remember that a whistleblowing system alone does not create a healthy corporate culture.  

So, make sure you have the basics in place - and then get down to the real work!

Want to know more about how we work with compliance at Involve? Check out www.involve.com or contact us directly at hej@involve.com.

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